Qualified Opportunity Zones, six of which are located on the Northside, were the focal point for Secretary Dennis Davin’s keynote speech.
By Ashlee Green
Photos by Clifton Loosier
The Northside Community Development Fund (NSCDF) celebrated its annual community and business luncheon on Friday, Nov. 30, 2018 at the Lexus Club at PNC Park. Dennis Davin, Pennsylvania Secretary of Community and Economic Development, was the event’s keynote speaker.
“Our administration is committed to working with everyone in this room to keep Pittsburgh’s momentum going forward,” said Secretary Davin to a crowd of Northside business owners, bankers and community representatives.
Secretary Davin discussed the commonwealth’s decision in June to nominate 300 statewide census tracts as Qualified Opportunity Zones. Qualified Opportunity Zones have at least a 20 percent poverty rate or a median family income of 80 percent or less of statewide or metropolitan area family income. The 300 tracts—six of which are located in the Northside—were chosen by Governor Tom Wolf out of close to 1,200 eligible ones as the most attractive to investors. Secretary Davin pledged to work with leaders in the Northside to promote investment in the region.
“Everything we do at the state level doesn’t mean anything if we don’t have strong partners at the local level,” he said. “The last thing we want to see is for Pittsburgh to take their foot off the gas.”
Qualified Opportunity Zones were created as part of the Federal Tax Cuts and Jobs Act of 2017 to foster low-income communities with long-term investments. As part of the program, investors receive tax benefits for putting capital gains funds into businesses, real estate and other projects in low-income communities. Federal capital gains taxes can then be deferred, reduced and possibly eliminated altogether.
According to Secretary Davin, one of the reasons Amazon showed interest in Pittsburgh as the site of its second headquarters was the talent coming out of the city, particularly from Carnegie Mellon University.
“At the end of the day, Pittsburgh wasn’t probably sized right for Amazon, and that’s OK, but the talent is here,” he said in an interview after his speech.
Talent, Secretary Davin said, is what’s informing the Opportunity Zones program regulations, which are still to be determined by the U.S. Department of the Treasury. More specific opportunities for investment in the Opportunity Zones are expected to be released from the IRS by the end of the year.
“Pittsburgh needs to continue to do what they can to develop properties,” said Secretary Davin. “Communities really need to develop out from their strengths.” He commended former Pittsburgh Mayor Tom Murphy for developing the city’s riverfront property, calling it “one of Pittsburgh’s greatest strengths.”
“We already have strengths,” said Secretary Davin. “Strengths are the ballparks, strengths are the riverfronts, strengths are the proximity to downtown, East Ohio Street. Strengths are the parks, strengths are the Mexican War Streets, Allegheny General Hospital. [They] need to be taken care of and built out from there.”
Secretary Davin also talked about plans in the works for the State Correctional Institution (SCI) on the banks of the Ohio River. A few years ago, in an effort to reduce prison costs statewide, he was part of an analysis of all of the prisons in the Commonwealth of Pennsylvania and helped determine that SCI offered the best opportunity for development. Developments, he said, could be residential or commercial, or they could mean the creation of park land or the expansion of Alcosan.
“That’s not for us to say,” Secretary Davin said. “That is for the local folks to say: the Urban Redevelopment Authority (URA), and more importantly, the community around them.”
The SCI site is currently undergoing analysis from both the Pennsylvania Department of Community and Economic Development and the URA to determine its historical value and whether or not it has issues with asbestos or underground contaminants.
“We want the right thing to happen there,” said Secretary Davin. “We don’t know what that is just yet.”
He has a positive outlook on the future of Pittsburgh, and the Northside.
“The bones are there, which means that the structure and the infrastructure is there. [They’ve] always been there in the Northside,” said Secretary Davin. “The Northside Leadership Conference, the Foundation, the Fund, the City, the URA, have done a great job of updating everything. I see great things that are going to continue to happen.”
“[Pittsburgh’s] on everybody’s list,” he said. “There’s no shortage of good news about this region.”
NSCDF was founded in 2000 as a subsidiary of The Northside Leadership Conference with a mission to promote community development and investment on the Northside. NSCDF provides loans, financing and development services to businesses and real estate development projects throughout the Northside’s 18 neighborhoods. In the past year, NSCDF provided 24 loans totaling more than $2.3 million to businesses and real estate development projects, including nine micro-loans totaling $233,000 to help nine small businesses get started or expand.* In the past seven years, they have made 147 loans totaling $12.7 million. Twenty-four percent of their existing loans to for-profit companies are to minority-owned firms, 33 percent are to women-owned businesses and 26 percent are to nonprofits, mainly neighborhood-based organizations, to create affordable housing, eliminate blight and provide spaces for businesses serving the neighborhood.
For more information, visit http://www.nscdfund.org.
*A previous version of this story incorrectly reported that NSCDF provided nine micro-loans totaling $233,000 to help nine small businesses get started or expand in the past seven years. These nine micro-loans were actually all provided in the past year.